^^'^^  VICTORIA  UWVERS/rr 

\^S  -LIBRARY 

'^  A  CANADIAN  SCHEME 


OF 


AGORESSION 


UPON 


AMERICAN  COMMERCE, 


AND  HOW  IT  SHOULD  BE  TREATED. 


BY 


JOSEPH    MMMO,   Jr. 


lA{ 


May,   1889 


WASHINGTON,  D.  C. 
Gibson  Bros.,  Prinikrs  and  Bookbin^E'^s 

18S9. 


INTRODUCTORY  REMARKS. 


The  chief  object  had  in  view  in  the  preparation  of  this 
article  has  been  to  present  the  constantly  growing  and 
now  clearly  developed  necessity  for  a  thorough  rectifica- 
tion of  our  commercial  relations  with  Canada,  if  not,  in- 
deed, for  a  radical  change  of  policy  regarding  our  Canadian 
relationships  generally. 

The  almost  absolute  freedom  of  restraint  which  marked 
the  beginning  of  the  "  transit  trade  "  has  been  found  to  be 
in  important  particulars  incompatible  with  a  pioper  ad- 
ministration of  our  Interstate  Commerce  Act.  The  rail- 
road political  policy  maintained  by  Canada  during  the  last 
twenty  years  has  shut  railroad  extension  by  American 
companies  out  of  the  Dominion,  while  Canadian  companies 
have  been  enabled  under  the  provisions  of  general  rail- 
road laws  of  our  border  States  and  by  persistent  entreaty 
at  the  doors  of  State  legislative  halls  to  gain  every  year 
some  new  favor.  By  dint  of  almost  unremit^^ed  begging, 
the  Treasury  Department  has  also  been  coaxed  into  the 
granting  of  favors  to  Canadian  railroads,  until  dutiable 
goods  may  be  transported  through  Canada  with  even  less 
restraint  of  our  customs  regulations  than  is  imposed  upon 
American  railroads.  The  whole  situation  of  afi'airs  lacks 
those  essential  elements  of  reciprocity,  which  should 
always  cliaracterize  international  arrangements,  both  of 
treaty  and  of  comity. 

The  Treaty  of  Washington,  by  a  blunder  or  a  fraud, 
gives  to  Canadian  railroad  companies  the  right  to  trans- 
port goods  from  one  point  in  the  United  States,  tli rough 
Canadian  territory,  to  another  point  in  the  United  States, 
without  payment  of  duty,  but  omits  to  give  to  American 


railroad  companies  the  reciprocal  right  of  transporting 
goods  from  one  point  in  Canada,  through  the  United  States, 
to  another  point  in  Canada,  without  payment  of  duty. 

For  several  years  past  the  Dominion  government  has 
granted  a  rebate  of  18  cents  a  ton  on  grain  passing  through 
the  Wolland  Canal  in  favor  of  export  via  Montreal,  al- 
though the  practice  is  held  in  this  country  to  be  clearly  in 
violation  of  Art.  XXYII  of  the  Treaty  of  AVashington. 
Although  Canadians  are  constantly  shipping  merchandise 
across  the  territory  of  the  United  States,  even  to  the  value 
of  $40,000,000  a  year,  free  of  duty,  the  Dominion  govern- 
ment still  refuses  to  allow  American  fishermen  to  ship  pro- 
ducts of  the  sea  fisheries  across  Canadian  territory  free  of 
duty.  But  the  most  vexatious  and  injurious  disturbance 
of  the  natural  interaction  of  commercial  forces  has  arisen 
from  the  eonstriiction  of  the  Canadian  Pacific  Railway,  by 
means  of  a  governmental  subsidy  of  over  two  hundred 
million  dollars,  in  connection  with  heavily  subsidized 
steamer  lines  across  the  Atlantic  and  the  Pacific,  which 
steamers  receive  additional  British  Admiralty  subsidies  in 
consideration  of  the  fact  that  they  are  so  constructed  as  to 
be  available  as  armed  cruisers.  These  warlike  features  of 
a  political  scheme  for  turning  trade  out  of  the  natural 
channels  are  accentuated  by  a  formidable  British  military 
establishment  on  the  Pacific  coast. 

The  uncertainties  which  characterize  our  Canadian  re- 
lationships and  the  audacious  and  persistent  course  of 
the  Dominion  government  in  taking  advantage  of  such 
uncei-tainties  and  of  using  the  full  force  of  its  political 
power  in  the  direction  of  diverting  American  commerce 
has  led  the  United  States  Senate  to  assign  to  two  of  its 
committees,  within  the  limits  of  their  respective  spheres, 
the  duty  of  investigating  and  reporting  upon  our  Cana- 
dian relationships.  The  awakened  sense  of  our  people 
in  regard  to  this  matter  has  also  thrown  a  weight  of  re- 
sponsibility upon  the  present  administration  of  the  Gov- 
ernment. i'>  ) 


The  nation  is  now  confronted  bj  conditions  at  the  North 
which  far  outweigh  any  possible  American  interests  which 
may  be  involved  in  the  internecine  struggles  of  unenlight- 
ened and  barbarous  people  upon  isles  of  the  sea  with  which 
our  commercial  and  political  relationships  are  of  compara- 
tively insignificant  value. 

Any  line  of  policy  which  fails  to  guard  the  commercial 
and  political  interests  of  the  United  States  against  Cana- 
dian encroachment  or  which  does  not  fully  and  fittingly 
respond  to  every  act  of  aggression  on  the  part  of  the 
Dominion  government  will  be  lacking  in  prescience  and 
in  courage. 


A  CANADIAN  SCHEME  OF  AGGBESSION. 


A  most  audacious  proposition  has  within  a  few  days 
been  made  by  the  Canadian  Pacific  Railway  officials. 
The  managers  of  that  line,  built  for  political  purposes 
inimical  to  the  United  States,  and  with  the  object  of 
diverting  American  commerce  from  American  steamer 
lines,  American  seaports,  and  American  railroads,  have 
come  up  here  and  asked  that  the  Secretary  of  the  Treas- 
ury shall  so  exei^cise  his  discretion  in  the  conduct  of  the 
*'  transit  trade  "  as  to  place  their  road  upon  terms  of  per- 
fect equality  with  American  lines,  or,  in  other  words,  en- 
able it  to  establish  connections  for  tapping  American 
transportation  lines  and  diverting  commerce  from  Ameri- 
can cities.  It  is  proposed,  in  this  connection,  briefly  to 
consider  the  true  character  of  this  new  and  glaring  in- 
stance of  Canadian  presumptuousness. 

The  (Canadian  Pacific  Railway  is  a  political  and  military 
enterprise,  conceived  and  carried  to  execution  for  the  pur- 
pose of  accomplishing  the  following  objects  : 

'  '  \ 

First.  Politically  to  unite  the  four  disconnected  blocks  of 
inhabited  territory  comprising  the  Dominion  of 
Canada. 

Second.  To  cause  these  foiir  sections  of  the  Dominion  to 
trade  among  themselves  instead  -of  trading  with 
the  United  States. 

Third.  To  suppress  the  growth  in  Canada  of  a  sentiment 
favorable  to  annexation  to  the  United  States. 

Fourth.  To  divert  as  much  as  possible  of  the  internal  and 
foreign  commerce  of  the  United  States  from 
American  transportation  lines  and  American 
cities. 

Fifth.  To  serve  as  a  line  of  military  communication  be- 
tween the  different  parts  of  the  Dominion. 


7 

Sixth.  To  promote  the  scheme  of  British  Imperial  Con- 
federation, to  which  the  leaders  of  the  Dominion 
Government  are  devoted. 

These  several  objects  were  fully  discussed  throughout 
the  Dominion  when  the  proposition  to  construct  the  road 
was  under  consideration,  and  an  appreciation  of  their  po- 
litical importance  led  to  the  accomplishment  of  the  enter- 
prise. 

Sir  John  A.  Macdonald,  the  Premier  of  Canada,  aijd 
chief  promoter  of  the  Canadian  Pacific  Railway,  declared 
a  year  ago  to  the  editor  of  the  Pall  Mall  Gazette  that  his 
chief  aim  was  to  establish  a  strong  government  on  this  conti- 
nent, hased  upon  monarchial  principles^  and,  at  the  same 
time,  he  expressed  his  ardent  espousal  of  the  cause  of 
British  Imperial  Confederation — the  Canadian  Pacific 
Railway  being  the  chief  instrumentality  for  the  accom- 
plishment of  both  those  objects. 

In  order  to  carry  out  its  gigantic  political  and  military 
scheme,  inimical  to  the  interests  of  the  United  States,  the 
Canadian  government  has  incurred  expenditures  whereby 
its  debt  has  been  increased  from  $96,896,666,  in  1868,  to 
$284,513,842  in  1888.  In  a  word,  the  Dominion  govern- 
ment, for  the  accomplishment  of  this  object,  has  imposed 
upon  the  people  of  Canada,  with  their  consent,  a  burden 
of  debt  proportionally  as  great  as  that  assumed  by  the 
loyal  people  of  the  United  States  in  order  to  preserve  our 
Union. 

The  political  character  of  the  Canadian  Pacific  Railway 
is  indicated  by  the  fact  that  it  has  received  from  the  Do- 
minion government  the  following  subsidies  : 

Cash  and  concessions  which  became  available 

as  cash $105,000,000 

Bonds  and  stock  guaranteed  by  the  Dominion 

government 110,000,000 

Total  subsidy $215,000,000 


President  Van  Home  of  the  C«anadian  Pacific  Railway 
WHS  compelled  to  own  up  to  this  entire  subsidy  before  the 
Interstate  Commerce  Committee  of  the  United  States 
Senate  at  its  last  session  in  New  York. 

Recently  there  has  appeared  a  statement,  which  I  have 
not  yet  been  able  to  verify,  that  during  its  late  session  the 
Dominion  parliament  appropriated  $53,0U0,000  for  rail- 
wav  subsidies. 

The  total  cost  of  the  Canadian  Pacific  Railway,  with  its 
equipment,  plant,  <tc.,  &c.,  was,  however,  only  $165,000,- 
000.  The  total  stock,  bonds,  and  liabilities  of  the  road 
amount  to  only  $121,000,000. 

The  enormous  subsidy  granted  to  this  Company  so 
greatly  in  excess  of  the  cost  or  capital  of  the  road  has 
enabled  it  to  enter  upon  bold  schemes  for  the  capture  of 
American  commerce.     This  it  has  done  and  is  now  doing. 

A  steamer  line  has  been  established  on  the  Pacific  with 
a  subsidy  of  1300,000  a  year  as  against  |16,75C  paid  by 
the  United  States  Government  for  the  carriage  of  our 
Asiatic  mails.  Besides,  the  Dominion  government  has 
just  granted  a  subsidy  of  $500,000  a  year  to  an  Atlantic 
steamer  line  to  operate  from  St.  Johns,  N.  B.,  or  Halifax, 
upon  the  completion  of  fclie  Canadian  Pacific  line  soon  to 
be  opened  across  the  State  of  Maine. 

These  steamers  on  the  Atlantic  and  the  Pacific  will  also 
receive  "  Admiralty  "  subsidies  from  the  British  govern- 
ment, in  consideration  of  which  fact  they  are  all  to  be  so 
constructed  as  to  he,  available  as  armed  cruisers  in  the  event 
of  vmr.  .\  , ;  . , :  ^-  ■    _   .,  ;.   ■  -,  .  -.'   ,  ._  ..._  ,.  :..:.,..;^,_ 

The  i)olitical  and  military  character  of  the  Canadian 
Pacific  enterprise  is  also  clearly  indicated  by  the  formida- 
ble fortress  and  naval  station  within  sight  of  our  shores  at 
Esquimalt,  on  the  Island  of  Vancouver.  A  prominent 
officer  of  the  British  Navy  declares  that  this  establish- 
ment "  holds  a  pistol  at  the'  head  of  San  Francisco."  The 
following  press  despatch  of  the  28th  inst.  seems  to  indicate 
the  present  significance  of  this  naval  station  : 


9 

IS   THIS   A   MENACE? 

Victoria,  B.  C,  May  28. — The  entire  Britisli  fleet  now 
at  Esquinuilt,  consisting  of  the  war  ships  Swiftsiire,  Am- 
phion,  and  Icarus,  have  received  orders  to  proceed  to 
Behring  Sea.     Thoy  will  sail  June  10. 

Alreadv  the  United  States  Government  has  been  forced  to 
take  the  preliminary  steps  toward  the  erection  of  a  naval 
and  military  station  at  the  entrance  to  Puget  Sound,  which 
is  now  totally  unprotected  against  attack.  Surely  it  is 
time  for  us  to  awake  out  of  sleep. 

The  commercial  and  political  attitude  of  the  Canadian 
Pacific  Railway  towards  the  United  States  is  quite  the  re- 
verse of  that  of  the  Grand  Trunk  Railwav,  The  latter  has 
received  from  the  Dominion  government  only  $25,607,393, 
its  total  cost  having  been  $247,507,306,  whereas  the  Cana- 
dian Pacific  has  received  aid  from  the  Dominion  govern- 
ment to  the  amount  of  $215,000,000,  its  cost  having  been 
only  $105,000,000.  Again,  the  Grand  Trunk  carries  a 
large  amount  of  American  produce  through  Canada  and 
to  Montreal  for  export,  but  it  also  brings  to  American 
lines  and  to  American  seaports,  chiefly  New  York,  Boston, 
and  Portland,  Maine,  a  large  amoimt  of  traflic.  Through 
these  ports  Canadian  commerce,  to  the  amount  of  about 
$40,000,000  a  year,  is  carried  on.  But  the  Canadian 
Pacific  is  reaching  out  for  all  the  American  commerce  it 
can  get,  and  it  proposes  to  wheel  it  through  the  forests  of 
Maine  over  its  rail  line  in  that  State,  subsidized  at  the  rate 
of  $180,000  a  year,  and  connecting  with  a  steamer  line  to 
Europe,  subsidized  to  the  amount  of  $500,000  a  year,  thus 
cutting  off*  New  York,  Boston,  and  Portland,  and  their 
tril)utory  railroads,  from  the  benefits  they  enjoy  of  the 
"  transit  trade  "  through  the  Grand  Trunk  and  its  connec- 
tions in  this  country. 

On  the  West  our  Asiatic  commerce  is  also  being  cut  off" 
from  San  Francisco  and  from  our  trans-continental  rail- 
roads by  the  sheer  force  of  Canadian  and  British  subsidy, 


10  "^ 

amounting  for  the  one  railroad  to  more  tlian  four  times  as 
much  as  the  total  amount  of  aid  granted  by  the  United 
States  Government  to  all  our  trans  continental  railroads. 

But  if  Canada,  with  a  population  of  less  than  six  mil- 
lions, can  afford  to  pay  nearly  ten  millions  of  dollars  a  year 
interest  on  a  debt  of  $284,513,841 ,  contracted  mainly  for  the 
purpose  of  preventing  her  own  citizens  from  trading  with 
the  United  States  and  of  capturing  a  large  part  of  the  in- 
ternal and  foreign  commerce  of  the  United  States,  surely 
the  United  States  with  more  than  ten  times  the  popula- 
tion, and  probal)ly  twenty  times  the  wealth  ;  and,  hopefully, 
an  equal  degree  of  patriotism,  ought  to  be  able  to  defend 
itself  Against  Canadian  aggression. 

The  present  proposition  to  place  the  Canadian  Pacilic      ^ 
in  our  international  traffic  arrangements  on  the  same  plane 
with  our  American  lines  is  manifestly  absurd. 

The  whole  Canadian  Pacific  Railway  scheme,  with  its 
Esquimault  fortress  and  its  subsidized  steamer  line 
"  armed  cruiser  "  appurtenances,  vividly  call  to  mind  one 
of  the  strongest  points  made  by  our  forefathers  in  their 
grand  indictment  of  the  King  of  Great  Britain  in  1776, 
viz.",  that  he  had  "  given  his  assent  to  legislation  for  cutting 
off  our  trade  with  all  parts  of  the  world."  This  is  just 
what  Canada,  in  her  own  peculiar  way  and  to  the  extent 
of  her  power,  is  now  doing.  The  present  proposition  tliat 
the  United  States  Government  shall  aid  Canada  in  work- 
ing her  sweet  will  in  diverting  tlie  internal  and  foreign 
commerce  of  this  country  is  enough  to  make  the  lilood  of 
every  true  American  boil  with  indignation.  It  would  be 
much  more  sensible  and  patriotic  for  us  to  devise  some 
plan  of  discrimination  against  Canadian  and  British  ag- 
gression.    That  is  an  obvious  duty  of  the  hour. 

The  assertion  that  the  Canadian  Pacific  line  is  shorter 
and,  therefore,  a  cheaper  route  than  any  one  of  the  Amer- 
ican lines,  is  utterly  false  and  absurd.  The  (vanadiaii  Pa- 
cific is  simply  a  British  slugger  in  American  commerce, 
driving  traffic  out  of  its  natural  channels  by  the  sheer  force 


11 

of  subsidy.     It  has  very  appropriately  been  termed  the 
Canadian  Government  on  wheels.    To  call  it  "  a  mere  com- 
mercial enterprise  "  is  a  solecism  of  the  baldest  character. 
In  the  face  of  the  facts  just  stated  the  Canadian  Pacific 

officials  have  the  audacity  to  come  up  here  to  AVashington 
* 

and  ask  the  Secretary  of  the  Treasury  to  use  his  discre- 
tionary power  over  the  "  transit  trade  "  in  order  that  they 
may  be  enabled  to  loot  upon  the  internal  and  foreign  com- 
merce of  the  United  States.  The  time  is  especially  un- 
favorable for  such  an  attempt  in  view  of  the  difficulties 
which  are  being  met  in  carrying  out  the  provisions  of  our 
Interstate  Commerce  Act,  on  account  of  the  unrestrained 
condition  of  the  Canadian  roads  and  their  disposition  to 
take  advantage  of  their  extra-territorial  opportunities  for 
depredating  upon  the  American  roads.  Even  now  the 
Grand  Trunk  is  violating  a  clearly  expressed  agreement 
with  the  American  lines.  The  "  cut "  in  its  favor  thus  se- 
cured may  lead  to  a  railroad  war  and  the  demoralization  of 
commerce. 

The  inopportunity  of  the  present  petition  of  the  Cana- 
dian Pacific  is  also  marked  by  the  fact  that  only  a  few 
weeks  ago  the  Dominion  government  renewed  its  "  Order 
in  Council "  allowing  a  rebate  or  discrimination  of  18  cents 
a  ton  in  tolls  on  all  American  grain  shipped  to  Montreal, 
which  action  the  Hon.  Nelson  Dingley,  jr.,  of  Maine,  on 
the  floor  of  the  House  of  Representatives,  showed  a  year 
ago  to  be  clearly  and  flagitiously  in  violation  of  Art.  XXVII 
of  the  Treaty  of  Washington.  The  Dominion  government 
may  expect  to  be  called  to  account  for  this  infraction  of 
Treaty  agreements  before  its  alter  ego,  the  Canadian  Pa- 
cific Railway,  becomes  the  beneficiary  of  privilege  from  this 
Government. 

The  whole  story  of  Canadian  aggression  upon  American 
commerce  may  be  told  in  a  few  words.  From  the  time 
when  the  Wellaud  and  St.  Lawrence  Canals  were  opened 
the  United  States  has  adopted  a  policy  of  perfect  recipro- 


13 

city  of  transportation  facilities  toward  Canada,  in  what  is 
commonly  known  as  "  the  transit  trade."  Passage  through 
either  country  has  been  allowed  without  an}'  impediment 
of  customs  duties,  over  lines  partly  in  one  country  and 
partly  in  the  other,  and  forming  direct  routes  of  trans- 
portation between  the  West  and  the  seaboard.  If  railroad 
construction  in  the  two  countries  had  been  left  to  the  inter- 
action of  commercial  forces,  that  policy  might  have  been 
permitted  to  go  on  undisturbed.  But  the  Dominion  gov- 
ernment has  seen  fit  to  throw  the  full  force  of  its  political 
and  financial  power  into  the  struggle  and  given  it  an  en- 
tirel}^  new  character.  Besides,  the  Dominion  government 
has  all  along  taken  large  advantage  and  small  advantage 
of  every  opportunity  to  encroach  upon  the  commercial  in- 
terests of  the  United  States  by  discriminations  in  favor  of 
the  people  and  the  transportation  lines  of  Canada.  That 
government  obstinately  refuses  to  allow  citizens  of  the  / 
United  States  to  go  to  the  relief  of  American  vessels  in  Cana- 
dian waters — a  right  of  common  humanity — and  it  also  per- 
sistently refuses  to  allow  fish  caught  by  American  fishermen 
on  the  high  seas,  to  be  transported  free  of  duty  across 
her  territory,  while  Canadians  are,  every  year,  shipping 
millions  of  merchandise  across  our  territory  free  of  duty. 
The  story  is  one  of  international  relationships  between  a 
small  country  whose  foreign  policy  is  shrewdly  commer- 
cial and  a  large  country  whose  foreign  policy  is  ingen- 
uously political.  At  last  we  are  confronted  by  a  po- 
litico-military policy  regarding  the  conduct  of  commerce, 
such  as  character-  as  the  commercial  relations  existing 
between  contiguous  countries  in  Europe.  Our  Northern 
neighbor  has  thus  forced  us  to  the  consideration  of  a  new 
line  of  international  policy  which  shall  provide  adtjquate 
securities  for  the  honor,  the  dignity,  and  the  interest  of 

the  United  States. 

JOSEPH  NIMMO,  Jr. 
Washington,  D.  C, 

.      May  31,  1881). 


^■^^-  *- 


